iPhone 4 & iOS 7 keyboard lag fix

If you updated your iPhone 4 to iOS 7 and find your device unusable because of ridiculous keyboard lag, put that hammer back into the toolbox.

There is a simple fix that, so the rumour, works for everyone:
on your iPhone 4 go to Settings => iCloud and disable "Documents and Data".
For extra luck reboot, and whoooooosh - your keyboard should be behaving correctly.